Toward a New Paradigm: Political Economy in the 21st Century

Alexander M. Betley

St. Olaf College

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“It is not only species of animal that die out, but whole species of feeling. And if you are wise you will never pity the past for what it did not know, but pity yourself for what it did.”

— John Fowles, The Magus

Sir Robert Harry Inglis Palgrave’s Dictionary of Political Economy is not a short work.

The extensive three volume collection, published between 1894 and 1899, is a full-blown

compilation of most knowledge on economics and political economy at the turn of the century,

comprising, according to Palgrave’s introduction, “an absolutely new field in English literature”

(Palgrave, 1908, p. vii).

Broad in scope, Palgrave sought for his dictionary to move beyond the “old and formerly

well-recognised boundaries” of past study. New and burgeoning fields such as the “historical

school” and the “mathematical method of study” (a harkening to the works of figures such as

Francis Edgeworth, Stanley Jevons, and Léon Walras-- what would later come to be termed the

neo-classical or marginalist revolution) would supplement the topics developed by the Adam 1

Smiths, Thomas Malthuses, John Stuart Mills, and Karl Marxes (Palgrave, 1901, p. v). Yet it

was clear to Palgrave that even these new fields, important as they were (and remain), were “far

from exhausting the countless ramifications of inquiry… rightly thought necessary for the

complete investigation of a study bounded only by the requirements of human life in every social

relation” (Palgrave, 1901, p. V; emphasis my own).

It is a bit difficult to ascertain what Palgrave exactly meant by the “requirements of

human life in every social relation.” Did he mean, as many political economists before him did,

that economics was only concerned with the production and consumption of commodities,

1 For more on this, see the chapter entitled ‘The Victorian World’ in Robert Heilbroner’s esteemed The Worldly Philosophers.

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particularly the means and relations be which these commodities were consumed and produced? 2

Or did he mean, as J.S. Mill believed, that political economy merely referred to a science of

wealth, considering “mankind as occupied solely in acquiring and consuming wealth” (Mill,

1948, p. 138)? I find it more likely that Palgrave, like his dictionary, was intentionally broad,

employing the term “bounded only” to express the porous nature of political economy as a

somewhat limitless and imaginative field transcending-- though these topics certainly make up

much of its base-- the mathematical technicalities of production, consumption, and wealth.

Indeed, one would find immense difficulty limiting the “requirements of human life in every

social relation” to the formal field of “economics” alone. Would such a broad boundary not call

upon its students to investigate the psychology of human relations, the politics, and perhaps even

the artistic output? Moreover, if we are to submit ourselves to the foundational concepts of

production and consumption, wealth and capital, distribution, and so on, is it not possible (dare I

say necessary?) that we look to fields beyond orthodox economics to elucidate the ways in which

these foundations operate within society at large?

This is precisely what this paper argues-- for a political economy “bounded only by the

requirements of human life in every social relation.” This includes an analysis and accounting

for the role of the state and other actors on economic processes, as well as a role for normative

thought. Tracing the historical division, and then following this tracing with the work of three of

today’s most prominent political economists, this paper hopes to demonstrate that political

economy is not just alive and well, but also pivotal to addressing today’s foremost social,

political, and economic challenges.

2 Indeed, this is the manner in which many of the earliest political economists defined their field. Political economy, as James Mill defined it, is merely “to ascertain the law… according to which the production and consumption are regulated by those commodities…. which the intervention of human labour is necessary to procure” (Mill, J., 3).

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Beginning to understand this complexity is political economy’s goal. For too long now

the economics field, aided by “benevolent dictators” and godly knowledge, wielding the scepter

of abstruse mathematical models, has pushed out its critics on “scientific” grounds. As we will

see, this is not so much a matter of theoretical rigor (I myself feel quite comfortable leaving the

labors of rational actor fictionalizing to theory once and for all), but one of practical application.

If economics, as any serious social science demands, is going to posit and attempt to solve the

issues society throws its way, it must transform its take on the field. As any field of critical

inquiry requires, economics must avoid doctrinaire and dogmatic methodology and thought,

dispense with the charade that normative valuation is somehow antithetical to the field (Indeed,

if we are to strive towards a more perfect society, mustn't we have a normative barometer with

which to gauge our successes and failures?), and embrace diversity of opinion, methodology, and

thought. This belief, suppressed though it has been, is not revolutionary. In fact, it has been the

method of some of the most groundbreaking and influential work in the economics field. As one

political economist has noted, “The more interesting economists to most readers of the history of

ideas are those who, from Adam Smith to John Maynard Keynes, offer such an avowedly

normative perspective within a larger political economy framework, using tools of conventional

analysis modified to meet their purposes” (Tabb, 1999, p. 16).

The fact is that there are real, complex problems to solve-- dealing with the economic,

social, and political effects of global climate change, striving towards full employment,

managing wealth and income inequality, handling the intricacies of globalization-- and it is the

imperative of intellectuals, economists among them, to aid in solving these problems.

Disinterested theoretical “objectivity” in economics, forever shielding itself behind the power

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dynamic of its own underlying assumptions as scientific fact, and thereby obscuring these

socially-fluid assumptions, undermines thoughtful, real-world, policy-oriented problem solving.

This is not to say that we should forsake intricate and, no doubt important, abstract mathematical

modeling, but abstract mathematical modeling cannot do it alone. It is true that models can be

tinkered with to account for various social inputs in producing their outputs, but, as J.S. Mill

correctly noted many years ago, politics and social processes are complex, and so, impossible to

experiment with reliably. There is no laboratory for the human condition but time and society

itself; the same laboratory historicists and empiricists, political economists and economic

scientists alike inhabit. The human condition-- if the reader would allow me to invoke the broad

sense of humanism running through literature and art and history and political theory-- is most

marked by unpredictability and spontaneity; the desire to control for behavior is fraught with

ethical and psychological, not to mention practical, dilemmas. In the world of social and

political and economic reality, there is no, in Bacon’s terms, experimentum crucis (Mill, 1948).

And so, “economic science” must only be applied and considered within the bounds of

culture, historical change, political institutions, and various social relations. All of these factors

weigh in, oftentimes in unquantifiable ways, on economic processes. In what becomes

something of an art-form, the political economist accounts for these features, and so can offer

broad-based, holistic policy advice, as well as political vision. Indeed, if the ultimate goal of the

social sciences is to more deeply understand our world, its social relations, and strive towards

justice and equality, the considerate approach of the political economist is sorely needed now

more than ever. As Edward Said has said, “Everyone today professes a liberal language of

equality and harmony for all. The problem for the intellectual is to bring these notions to bear on

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actual situations where the gap between the profession of equality and justice, on the one hand,

and the rather less edifying reality, on the other, is very great” (Said, 1994, p. 94).

The Difference Between “Economics” and “Political Economy”

William K. Tabb begins his book, Reconstructing Political Economy, with a chapter aptly

entitled “The Two Cultures in Economics (Tabb, 1999). Beginning with a Schumpeter quote on

the “preanalytic cognitive act” called “vision,” Tabb proceeds to tell that there are two types of

economists-- an “A” type and a “B” type (p. 18). Per the Schumpeter quote, much of one’s

approach deals with their vision for economics as a whole. The A type of economist is today

more common-- a logical positivist following in the tradition of economics as an a priori

discipline, that is, one purely theoretical and divorced from the constraints of the real world such

as time and political institutions. Indeed, neither of these matter much to many of the A type

economists. Time is not only not of the essence, but it, in fact, sometimes doesn’t exist at all,

making the logical empiricist always theoretically true. As for political institutions, some of the

A type economists in the past have gone as far as suggesting their theoretical world be governed

by a “benevolent dictator” with perfect knowledge, as well as complete charity and goodwill

towards his subjects (Frey, 1978). Given infinite boundaries, liberties, and alternate universes, it

is always possible to finagle oneself to justification of one’s point. The A type economist might

be logical within their theoretical landscape, but would be far less comprehensible in the

concrete life of everyday people.

The B Type of economist is one cut from the mold of the greats: Adam Smith, Karl

Marx, Veblen, Keynes, Schumpeter, Galbraith, and so on. As mentioned in the introduction,

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these political economists did not attempt to detach themselves from the real world, but to solve

its very real issues. They believed in normative thought, varieties of human behavior, and the 3

ways in which their ideas might be realistically applied or understood (Tabb, 1999, p. 16). Nor

do they attempt to wiggle free of material and psychological constraints. Rather, these feature

prominently into their analyses; such is the root of ideas like Keynes’s famed “animal spirits”

(Keynes, 1936). These are the type of thinkers that would fully embrace Palgrave’s call to be

bounded only by the “requirements of human life in every social relation.”

Tabb perhaps explains the distinction most succinctly:

The A group takes physics as its model. Not modern physics, with its interest in chaos and complexity, but seventeenth-, eighteenth- and nineteenth-century physics, bolstered by a theorem-driven mathematical fundamentalism. B science (which ironically is more like modern physics than is A type economic science) is historical, institutional, and comparative. Contingency and agency are important for B type economists” (p.18-9). In a word (and if complete polarities must be drawn), A type economists are the

economists of homo economicus; B types are those of homo sociologicus, along with her many

creations. A type economists are economic “scientists.” B type economists are, essentially,

political economists. The motto of the A type economist is “pure theory and pure theory alone.”

The motto of the B type is “theory, practice, and social contingency.”

Historical Change in the Profession

3 Keynes, for example, insisted that he was saving capitalism from itself: a lofty task to be sure, and one that requires a fair deal of consideration for how consumers and producers actually behave in the world. Marx is another example whose thought could not possibly be more dominated than by the material world-- indeed, it forms the basis of his theory of history.

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This division in the economics profession didn’t occur overnight. While there was

disagreement over the epistemological bases of political economy in its early years, there was 4

little sign of the mathematically-driven, profit-maximizing determinism of today’s orthodox

mainstream. Tracing the evolution of Palgrave’s original dictionary through to its modern

counterpart, The New Palgrave Dictionary of Economics, 2nd Edition , demonstrates this in quite 5

a profound way. For instance, the original Palgrave’s entry on “economic law” explicitly states

no such law is an exact science. Rather:

“In economics, where the conditions are dependent, not on the inanimate forces of natures, but on the variations of human feeling, passion, sentiment, and taste, it may well be thought that no generalisation, comprehensive enough to be useful, can be made…

4 This particularly relates as to whether or not economics and political economy are to be treated as an immutable science. Within classical political economy, this related to iron laws that held at all times much in the same way gravity holds at all times. At Tabb notes, David Ricardo would be firmly in the A type camp, where his law of rent belongs. Thomas Malthus, Ricardo’s contemporary, friend, and intellectual sparring partner, would be of the B type. This is perhaps most evidenced by Malthus’s introductory statement to his 1827 Definitions in Political Economy: “It has sometimes been said of political economy that it approaches to the strict science of mathematics. But I fear it must be acknowledged, particularly since the great deviations which have lately taken place from the definitions and doctrines of Adam Smith, that it approaches more nearly to the sciences of morals and politics” (Malthus, 1827, p. 2). Moreover, as Malthus continues, not everyone will agree on definitions in “such sciences as morals, politics, and political economy” (p. 3). Whereas Ricardo believed in hard-and-fast rules, Malthus acknowledged that what used to be called moral philosophy (today’s social sciences) would inherently be a field fraught with dissenting opinion. John Stuart Mill took a middle path of sorts. His famed essay, “On the Definition of Political Economy; And On the Method of Investigation Proper to It,” offers his nuanced, considerate approach. He, like Malthus, attributes political economy to the “laws of mind” rather than the “laws of matter,” that is, to what we would call today the social or soft sciences. For Mill, political economy is “the science relating to the moral or psychological laws of the production and distribution of wealth,” especially as this science relates to the social state (Mill, 1948, p. 133). In this sense, he falls in the B type camp. However, he also believes that political economy “pretends as though man were only concerned with wealth alone” (p. 140). Furthermore, he ultimately deduces that political economy as a discipline can only operate upon a priori logical truths as opposed to a posteriori experience. A Posteriori observation should only supplement an a priori-determined theoretical framework. Experience only serves as evidence to support or negate theoretical systems. And yet Mill also admits that the “moral sciences” and politics are immensely complex and, if to be completely verified, are needing of the laboratory of the hard sciences. However, no such laboratory exists and never will. Thus, the “affairs of states” are more an art than a science that should only be partially informed by the speculation of a priori political economy. In Mill’s own words: “No one who attempts to lay down propositions for the guidance of mankind, however perfect his scientific acquirements, can dispense with a practical knowledge of the actual modes in which the affairs of the world are carried on, and an extensive personal experience of the actual ideas, feelings, and intellectual and moral tendencies of his own country and of his own age” (p. 155). Thus, while political economy must make some unrealistic assumptions, its practical implications must be highly qualified. In a sense, Mill is saying to the profession, “Yes, use your models, explore mathematics; but do not presume such models should solve or direct the world’s affairs.” 5 One might also note that the original dictionary is a dictionary of “political economy,” whereas the edition released roughly a century later is called a “dictionary of economics.”

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indeed a science of economics on these lines is as inconceivable as a science of dynamics where every force is neglected excepting that of gravity. The great complexity and variety of circumstance which surround every economic problem are such as to render the enunciation of general laws, on a large scale, barely possible, and if possible barely useful… Economic laws are rather expressions of tendencies than actual predictions of cause and effect” (Palgrave, 1903, p. 676).

It is clear in this entry that absolute determinism of human behavior was not a dominating factor

in the political economy / economics of the day. However, the original Palgrave’s entry on

“economic science” does provide insight into where the profession’s mainstream would one day

head. Because, as Palgrave notes, some were concerned with the “laws of political economy

being violated,” by various political factions, “the terms ‘economic science’ and ‘economics’”

had “recently come more and more into use, as preferable alternatives for political economy” so

far as it was to be treated as a science (Palgrave, 1903, p. 678-9). However, as Palgrave makes

clear:

As to the scope of this science,-- it would be generally agreed that it is a branch of a larger science, dealing with man in his social relations; that it is to an important extent, but not altogether, capable of being usefully studied in separation from other branches of this science; and that it is mainly concerned with the social aspect-- as distinct from the special technical aspect-- of such human activities as are directed towards the production, appropriation, and application of the material means of satisfying human desires, so far as such means are capable of being exchanged… But to attempt a more precise determination of its method and scope, and especially its relation to the art or system of practical rules which should guide the action of governments or private individuals in economic matters, would require us to enter into questions of a highly controversial kind; which will be more conveniently discussed when we come to deal with the older and wider term ‘Political Economy’ (p. 678-9).

Such definitions are a far cry from the spirit of the preface of the 2008 edition of the

dictionary. The editors write that “the Dictionary has shed much of its historical character: from

providing a record of the development of economic thought, it has become more a snapshot of

contemporary economics… it places more emphasis on empirical work than have any of its

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predecessors, reflecting the significant empirical advances that have occurred in the

microeconomic fields in particular” (p. ix). Furthermore, the editors associate this “change in the

stock of knowledge” with, by all appearances, a positive “growth in economics” (p. ix). They

continue: “In order to accommodate this growth, much that interested Inglis Palgrave has been

jettisoned… public exchequers, foreign coinage, land tenure systems, legal and business terms,

social institutions, and many others, are all of interest but are… ‘only remotely connected with

economics.’” (p. xi).

What is perhaps most fascinating about this marked shift in thought is that it is apparent

to the editors that in their perceived positive growth of economic knowledge, historical

economics and social institutions have little role. Rather, the “significant empirical advances

that have occurred in the microeconomics field,” that is, the field of the fictionalized rational

actor, apparently must replace other “irrelevant” topics. Whereas Palgrave’s field of political

economy accounted for history and social institutions as a means to a study “bounded only by the

requirements of human life in every social relation,” the new economics, dominated by the

logical positivism of the Milton Friedman variety, grossly narrows its vision to a radically

imaginative discipline of perfect knowledge and free markets (Friedman, 1953; Friedman, 1962).

In the contest between the A type of economists and the B type of economists, the A types, if one

judges by the change in the nature of leading dictionaries, seem to have won the 100-year battle.

However, as the next section will show, political economy is by no means dead. There

exists an especially strong set of noble souls who reject the mainstream, and whose work has

begun to gain significant traction in academic circles, popular society, and political debate.

Particularly as human society faces down today’s global issues of transnational finance and

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capital mobility, sovereign debt crises, migration, and emerging right-wing nationalism in

Europe and the United States both, the work of political economists such as these must factor

more regularly into the policy debates of today’s globalized world.

Three Views on Political Economy Today

I will now (very) briefly outline the thought of three of today’s most prominent B type

economists (political economists) by analyzing each of them through their most prominent

works. Each economist will deal with separate issues, though admittedly, there are areas of

overlap. These economists demonstrate the role political economy can come to play in the

twenty-first century, particularly in their embrace of diversity of methodology and scope.

Thomas Piketty’s Capital in the Twenty-First Century deals primarily with wealth and income

inequality. Dani Rodrik’s The Globalization Paradox considers the tensions between

globalization, state sovereignty, and democracy. Lastly, Anwar Shaikh’s Capitalism:

Competition, Conflict, Crises presents a grand scheme of heterodox economics on capitalism,

especially relevant in its focus on the inherent turbulence and conflict within capitalistic modes

of production.

Piketty

Thomas Piketty begins his masterwork, Capital in the Twenty-First Century, with a quote

from the “Declaration of the Rights of Man and the Citizen” which reads that “social distinctions

can be based only on common utility” (Piketty, 2014, p. 1) Immediately jumping into the

normative debate on inequality, Piketty writes that “there will always be a fundamentally

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subjective and psychological dimension to inequality, which inevitably gives rise to political

conflict that no purportedly scientific analysis can alleviate. Democracy will never be

supplanted by a republic of experts-- and that is a very good thing” (p. 2). Throughout the book,

Piketty takes the values of democracy, justice, and equality as the barometers of any serious

academic undertaking, including that of economists. While Piketty believes in rationality in

pursuit of knowledge, he believes the most rational means of pursuing knowledge are broad

approachs steeped in the often-times subjective interplay of history, politics, economics, and at

times, art and literature. Thus, in commenting on his use of historical data, he says that:

“The history of income and wealth is always deeply political, chaotic, and unpredictable. How this history plays out depends on how societies view inequalities and what kinds of policies and institutions they adopt to measure and transform them. No one can foresee how these things will change in the decades to come. The lessons of history are nevertheless useful, because they help us to see a little more clearly what kinds of choices we will face in the coming century and what sort of dynamics will be at work. The sole purpose of the book… is to draw from the past a few modest keys to the future” (35).

For Piketty, it is long-run historical tendencies for the rate of return on capital to supersede the

rate of economic growth that leads to large levels of wealth and income inequality. Piketty

justifies this hypothesis with the theoretical tools of two “fundamental laws of capitalism” 6

supported by a lifetime’s collection of historical wealth and income data. What is Piketty’s

ultimate goal in his undertaking? It is not, so to speak, to seek new ways to maximize wealth

production and reproduction, but to ask whether or not high (and growing) levels of wealth and

income inequality in Western society are justified when considering the norms of a democratic

6 Though it should be noted that Piketty’s “laws” should not likely be treated in the same way the “iron laws” of past economics have been. As Palgrave suggested in his original dictionary, an “economic law” is closer to a tendency for something to occur given a particular set of circumstances. One may consider these circumstances in the same way Marx did, by calling them “modes of production.” Indeed, Marx’s theories on capitalism largely rested upon the social-relations constituting that mode of production. While not a Marxist by any means, I believe this is how Piketty largely sees his “two fundamental laws of capitalism,” that is, as long-term trends inherent to a particular mode of production (many thanks to Professor Paul Wojick for making this point clearer to me).

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society founded upon egalitarianism. Piketty does not attempt to hide his sympathies. Indeed,

the final lines of the 577 page work call on “all social scientists, all journalists and

commentators, all activists in the unions and in politics of whatever stripe, and especially all

citizens” to “take a serious interest in money, its measurement, the facts surrounding it, and its

history.” And as Piketty wittily concludes in regards to money, “Those who have a lot of it

never fail to defend their interests” (p. 577).

Yet all of this is part and parcel to the approach Piketty demands today’s economics

profession to take. Piketty sees economics as a subdiscipline of the social sciences, weighed

equally with history, sociology, anthropology, and political science. He rejects the notion of an

economic science, and instead explicitly calls for political economy, providing economics with

its true “political, normative, and moral purpose” (p. 574). This political economy concerns

itself with the role of the state in society, public institutions, and, ultimately, the ways in which,

collectively, a more ideal society might be achieved. It does not fully eschew abstract

mathematical modeling, but believes much of abstract modeling is superfluous, and that it should

only be used to outline and help solve concrete problems in society. Moreover, it should only be

considered one piece of the puzzle, the intersections of the other social sciences aiding in filling

the gaps. Echoing Edward Said’s remarks above, rather than removing themselves from public

debate, Piketty believes that “social scientists, like all intellectuals and all citizens, ought to

participate in public debate” (p. 574).

The role of political economist, then, becomes one intimately tied up with democratic

society. The point is not to sit upon one’s mathematical laurels, but to engage with the real

world, notwithstanding all its complexities and contradictions.

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Rodrik

Much like Piketty, Dani Rodrik follows an unorthodox approach to economics of the B

type variety. However, whereas Piketty deal with wealth and income inequality, Rodrik’s The

Globalization Paradox is a reflection upon globalization’s effects on state sovereignty and

democracy. Rodrik’s rather accessible work traces the ways in which states and markets

accompany one another, and have done so throughout capitalism and early capitalism’s history.

Citing both modern and historical evidence, he writes that, “If you want markets to expand, you

need governments to do the same” (Rodrik, 2011, p. 18).

This has become more difficult with the effects of globalization. Given the status of

today’s world of transnational finance and capital mobility, Rodrik develops what he calls the

“political trilemma of the world economy” (p. 200). It is in this trilemma where one can choose

only two of three options: democracy, state-sovereignty, and/or globalization. Democracy and

state-sovereignty may reign, but this will surely undermine the economic benefits of

globalization, Rodrik says. One could choose state-sovereignty and globalization, but then the 7

state would largely result in being managed by a technocratic bureaucracy with a significant

democratic deficit. The last option would be to choose global democracy and globalization,

ceding state-sovereignty to supranational governance. Yet, as Rodrik points out, due to the

7 Indeed, this is the route apparently being pursued by much of the far-right in Europe at the moment. Le Pen’s Front National, for example, calls for protectionist measures and a reclaiming of state sovereignty from the European Union. See Hugh McDonnell, “How the National Front Changed France.” It might also be worth reading the short article by Kate Connolly in the bibliography entitled “After the US, far right says 2017 will be the year Europe wakes up.”

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diverging interests of nation-states in today’s international realm, it is unlikely this route will be

pursued anytime soon.

In order to resolve this “trilemma,” Rodrik presents “the globalization paradox,” whereby

a reinvigoration of national democracy, led by supporting institutions at the global level,

manages today’s global market. Policy tools such as a Tobin tax on financial transactions would

discourage the rapid movement of “hot-money” in and out of countries by currency speculators.

Additionally, in much the same way the post-war Bretton Woods system allowed countries to put

development strategy at the fore of their economic agenda, developing countries should be

allowed wiggle-room to instate certain mild, protectionist barriers and capital controls.

As a political economist, Rodrik is explicitly skeptical towards orthodox, A type

economists. In his introduction, he discusses the role of economists in the 2008-2009 Financial

Crisis: “Economists (and those who listen to them) had become overconfident in their preferred

narrative of the moment: markets are efficient, financial innovation transfers risk to those best

able to bear it, self-regulation works best, and government intervention is ineffective and

harmful” (p. xii). At one point, this was so extreme that when Rodrik presented a critique of the

Sachs-Warner Washington Consensus in 2000, a prominent economist interrupted his 8

presentation to ask “Why are you doing this?” (Rodrik, 2011, p. 167). In Rodrik’s words, “The

idea of free trade had become such a sacred cow that someone who revisited the evidence needed

to have his motives questioned” (p. 167).

As alluded to above, Rodrik has a different vision for politics, economics, and society.

His vision is one in which many capitalisms are possible, and the state and economic processes

8 For more information on this famous article, see Sachs and Warner, “Economic Reform and the Process of Global Integration” in the bibliography. Rodrik’s critique of Sachs and Warner’s study is also listed in the bibliography.

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are considered partners, acting hand-in-hand (p. xviii). Rodrik understands the undue influence

orthodox economists have had on the decision-making processes of governments. Sounding

much like Piketty, Rodrik writes that, “Policy choices are surely constrained by special interests

and their political organization, by deeper societal trends, and by historical conditions” (p. xx).

He goes on to describe that “economists are humans too,” and that they make mistakes. The

problem has been that economists are “architects of the intellectual environment within which

domestic and international policy making takes place. They command respect and are listened

to-- ironically the more so the worse the economic situation. When economists get things wrong,

as they occasionally do, they can do real damage” (Rodrik, p. xxii). Rodrik’s primary message is

for policy-makers to be fully considerate of a holistic socio-politico-economics respective of the

many social science disciplines. Perhaps most importantly, dissension in the ranks must always

be permitted, lest we find ourselves staring once again over the economic precipice of financial

catastrophe.

Shaikh

Anwar Shaikh’s gargantuan of a book, Capitalism: Competition, Conflict, Crises is the

intensively researched result of his life’s work. In it, he has capitalism in its entirety as his

target. Early on, he makes clear the distinguishing characteristic of his book: “The goal… is to

develop a theoretical structure that is appropriate from the very start to the actual operation of

existing developed capitalist countries. Its object of investigation is neither the perfect nor the

imperfect but rather the real” (Shaikh, 2016, p. 5). Part of this take on reality is to account for

the “multidimensional structures of influences” that are “deeply hierarchical, with some forces…

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being far more powerful than others.” Hence, Shaikh concludes, “The stage on which history

plays out is itself moving, driven by deeper currents” (p. 5). This is not a world of static

operatives, but one always on the move, social relations forever shifting.

What characterizes Shaikh’s textbook on capitalism is that, at a distance, capitalism’s

processes appear smooth and forever expanding. Yet when one peers more closely, they quickly

see the “turbulent trends” that undergird so much of this expansive growth (p. 56). It is within

this framework that Shaikh flatly rejects the notion of the “representative agent” as an unsound

model for real human behavior. Human behavior, rather, is random and spontaneous from

person to person and culture to culture. Contradicting Shakespeare’s Hamlet, Shaikh remarks

that humans are, in fact, “not noble in reason, not infinite in faculty” (p. 78). Instead of the

orthodox, neo-classical homo economicus, Shaikh claims that “the individual must be conceived

as socially-situated, structured and shaped by nationality, gender, ethnicity, and class” (p. 110).

These constructive subjectivities play into what Shaikh terms “real competition,” as opposed to

the neo-classical perfect competition or the post-Keynesian imperfect competition: “The

economic dynamics of capitalism arise from competition itself. There was never any Garden of

Eden, and our current condition does not stem from its loss” (p. 745-7).

Shaikh’s rejection of the economics mainstream puts him firmly in the B type economist

camp. His political economy, while heavily reliant upon mathematical proofs, is considerate of

the real world and its many intricacies, complexities, and subjective identities. Thus, it provides

a firm grounding to challenge the dominant neoclassical discourse of the last 30-40 years.

The Political Economist of the 21st Century

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As should be quite evident, the common feature these three economists share is that they

are all skeptical of an “economic science” which purports to expound absolutist maxims for all

people and all societies across all times. They recognize that there are many forms capitalism

and economic society take, and that assuming static social conditions is neglecting the realities of

human social life (indeed, economics never has and never will take place in a vacuum). As

Shaikh aptly put it, “The stage on which history plays out is itself moving, driven by deeper

currents” (Shaikh, 2016, p. 5). Cultures and civilizations, though most largely playing by the

broad and malleable rules of capitalist society, are not homogeneous entities. Global commerce

still reeks of the inequalities resulting from colonialism and imperial domination (Shaikh, 2016,

p. 71). Moreover, as the popular work of economists such as Rodrik, Chang, and Stiglitz shows,

the attempts of developed countries, through international bodies such as the International

Monetary Fund, to dictate unto developing countries which development policies to pursue, have

been fraught with hierarchical, patrimonial power structures reminiscent of formal imperialism.

As the lesser-known, moral philosopher Adam Smith recognized, wealth is power, and where

there is much wealth, there will be much inequality (Heilbroner, 1993). The political economist

of today reckons with this reality.

The economists presented exemplify the best in the political economy tradition today.

They seek out and address real-world problems, accounting for all possible variables: history,

culture, government structure, political interest groups, among others; and they seek to offer

rational, thoughtful solutions. They believe in the role of normative thought because they know

that human society is not dictated by gravity-like laws. They are considerate of social-relations

and how these relations change, and that many times these relations change because existing

Betley 19

relations are held up to a normative barometer. Of the three, Piketty comes through strongest on

this front. He asks: if we are to be serious about equality and justice and merit, should we not be

engaging with work that concerns itself with these ideals? Shaikh is more descriptive of the

entire capitalistic framework, asking: Does the economics orthodoxy really help us understand

the ever-shifting dynamics of capitalism? Underlying his thought is not so much an explicit

normativity, but the implicit sense that the economics orthodoxy has only supplemented the

ability of wealth and capital to exploit labor; one might go as far as saying cementing the

“natural” master-slave relationship Aristotle believed was inherent to all social relations

(Aristotle, Book I). Lastly, Rodrik, in his analysis of state-sovereignty, democracy, and

globalization, laments the fact that A type economists exercise such powerful and influential

groupthink. As any good social science researcher would, he believes in dissenting opinion and

a healthy dose of skepticism from time to time.

These three thinkers are surely not alone, and as the world’s issues become increasingly

complex, I suspect the ranks of the political economist in the twenty-first century will swell.

Interdisciplinary research will grow. Stronger analyses of social relations will become more

common, and, it is the hope of this writer, that the social sciences will work collectively as a

problem-solving unit to solve many of the frightening issues of the twenty-first century. And,

for a bit of optimism, why not? What could be more attractive than a “field of study bounded

only by the requirements of human life in every social relation?”

Betley 20

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